Outsiders want “green” path for farm subsidies

May 8, 2006

WASHINGTON (Reuters) – Congress should rewrite U.S. farm
subsidy law dramatically to encourage land stewardship and
protect farm income by “revenue-based risk management systems”
that would replace an automatic spigot into the U.S. Treasury,
a coalition of environmentalists and others proposed on Monday.

Mainstream farm groups want a continuation of the 2002 farm
law, which sharply boosted grain, cotton and soybean support
levels and costs to about $20 billion a year.

Lawmakers are scheduled to overhaul U.S. farm policy in
2007 amid pressure to curtail federal spending and to revise
subsidies so they cannot be challenged by trading partners. An
adverse World Trade Organization ruling has forced the end of a
major cotton export subsidy.

After more than a year of work, a coalition of small-farm
advocates, environmentalists, deficit hawks and anti-hunger
activists called for more attention to land stewardship and
healthful foods along with elimination of target prices, one of
the three ways of paying grain, cotton and soybean subsidies.

While numerous, the groups in the coalition normally do not
have the ear of the congressional committees that write farm
law.

Under the target price approach, additional subsidies are
paid automatically to farmers if returns from sales and
subsidies fall below the triggers set by law. The coalition
says target prices should be replaced by “revenue-based risk
management systems.”

By coincidence, Agriculture Secretary Mike Johanns was to
release on Monday an Agriculture Department analysis of risk
management issues. Risk management is a broad category running
from forward-contracting of sales and use of futures markets to
crop insurance and tax-deferred “rainy day” accounts.

The coalition said it supported “green” payments to pay
farmers for making land, water and wildlife stewardship part of
day-to-day operation of America’s “working” farm and ranch
land. They also proposed a new cooperative conservation program
to encourage further stewardship.

They also proposed a $1 billion program “to foster
innovative enterprises, markets and regional food systems.” The
goal was to improve Americans’ access to fruits and vegetables.
Those “specialty” crops account for a large share of U.S. farm
output but do not directly receive payments.

“Today, we are calling on other agricultural leaders to
join us in forging a long-overdue new vision for farm policy
that will strengthen the future of U.S. agriculture,” said
Ralph Grossi in a statement. Grossi is head of American
Farmland Trust, a leading group in the coalition.

Copies of the coalition plan were available on the Internet
at http://www.farmland.org, said American Farmland Trust.